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The CarbonNeutral Protocol
The global standard for carbon neutral programmes
January 2019
The CarbonNeutral Protocol | January 2019
Natural Capital Partners works with and supports the following internationally recognised bodies:
BUSINESS
RENEWABLES
CENTER
A ROCKY MOUNTAIN INSTITUTE INITIATIVE
PROJECT
DRAWDOWN
2
The CarbonNeutral Protocol | January 2019
Publishing and copyright information
CarbonNeutral® is the registered trademark of Natural Capital Partners. The copyright notice displayed
in this document indicates when the document was last issued. © Natural Capital Partners 2019.
CarbonNeutral Protocol Versions and Amendments
The CarbonNeutral Protocol was first launched in 2002 and is revised every year
in accordance with the latest business, scientific and environmental standards.
Version 13 of the CarbonNeutral Protocol, published in January 2019, includes the
following amendments:
Technical Annexes
n New: Use of the CarbonNeutral certification logo
n Updated: Approved environmental standards now include energy attribute certificates (EACs)
n Updated: Attestation reports
Appendices
n New: EAC application for third party assessment partners
n Updated: Guidance on addressing transmission and distribution (T&D) losses with EACs
Please contact Natural Capital Partners should you wish to view the amendments made
to previous versions.
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Table of Contents
Glossary of Terms..................................................... 5 G. Requirements and Guidance
for GHG Emissions Assessments..................... 47
Preface..................................................................... 15 G1. Illustrative table of results
Target audience.............................................................. 18 for CarbonNeutral® certification............................ 48
About Natural Capital Partners................................... 18 G2. Example GHG assessment
Acknowledgements........................................................ 18 validation report format........................................... 49
Use, legal disclaimer and copyright........................... 18
Awards............................................................................... 18 H. Authorisation and Management
of Secondary Certifiers...................................... 50
Introduction............................................................. 19
Purpose............................................................................. 20 Appendices for Guidance and Clarification......... 51
Approach and principles............................................... 20
Relationship to other standards, 1. Pertaining to “Defining the Subject”................. 52
protocols and broader context................................... 21 1.1. Emission reduction project types
Structure of The CarbonNeutral Protocol................ 21 excluded under The CarbonNeutral Protocol.... 52
Development of The CarbonNeutral Protocol........ 21 1.2. Corporate value chain (Scope 3)
accounting and reporting........................................ 53
The Five Steps to Achieving 1.3. Selecting boundaries for “cradle to
CarbonNeutral® Certification................................ 22 customer” CarbonNeutral® products................... 55
Step 1: Define the Subject............................................ 26 1.4. Using Environmental Product Declarations
Step 2: Measure the Subject’s GHG Emissions....... 26 (EPDs) for CarbonNeutral® products.................... 56
Step 3: Set Target........................................................... 30 1.5. Treatment of assets rented or leased
Step 4: Reduce Emissions............................................ 31 to customers of CarbonNeutral® entities............ 59
Step 5: Communicate.................................................... 34
2. Pertaining to “Measure the Subject’s
Technical Annexes.................................................. 36 GHG Emissions”.................................................. 59
2.1. Treatment of renewable (“green”)
A. List of CarbonNeutral® Certifications............... 37 electricity in Scope 2 emissions............................. 59
2.2. Market-based Scope 2
B. CarbonNeutral® Certifications reporting declaration................................................ 60
and their Emissions Sources............................. 37 2.3. Third-party assessment partners,
B1. CarbonNeutral® entity certifications – EAC application protocol......................................... 60
required GHG emissions sources......................... 38 2.4. Guidance on how to report
B2. CarbonNeutral® product certifications – GHG emissions from green gas............................. 60
required GHG emissions sources......................... 39 2.5. Measuring the climate impacts
B3. CarbonNeutral® activity certifications – from aviation............................................................... 63.
required GHG emissions sources......................... 40 2.6. Determining aviation emissions
B4. Endnotes.............................................................. 41 from flight distances................................................. 64.
2.7. Treatment of recycled waste –
C. Requirements and Guidance on the use substitution within GHG assessments................. 65
of the CarbonNeutral® certification logo......... 42 2.8. Water consumption and waste
water treatment......................................................... 65
D. Approved Environmental Instrument Standards....42 2.9. Guidance on quality assurance
and verification........................................................... 65
E. Recognised Non-carbon Accounting Standards....44 2.10. Guidance on how to report GHG
emissions from carbon neutral services
F. Cross-compliance Tables................................... 45 within a corporate GHG inventory........................ 67
F1. Relative to PAS 2060: 2014 specification
for the demonstration of carbon neutrality........ 45 3. Pertaining to “Reduce Emissions”..................... 68
F2. Relative to Australia’s National Carbon 3.1. Guidance on evaluating
Offset Standard Carbon Neutral Program.......... 46 internal GHG reduction projects........................... 68
3.2. Guidance on setting internal
reduction targets....................................................... 70
4 3.3. Guidance on insetting...................................... 70
naturalcapitalpartners.com
Acre Amazonian Rainforest
Glossary of Terms
Conservation Portfolio, Brazil:
The three projects work with
communities and local groups
to help protect ecosystem services
while providing alternative models
of economic development which
avoid destruction of the forest
The CarbonNeutral Protocol | January 2019 Glossary of Terms
A
Additional (also additionality): Refers to an external It generates Australian Carbon Credit Units
emission reduction project from which emissions (ACCUs). Established under the Australian
reductions are verified as carbon credits under an National Registry of Emissions Units Act 2011,
applicable carbon accounting standard. An emission the CFI has provisions that address additionality,
reduction project is said to be additional when it can permanence and double accounting.
be demonstrated that in the absence of the availability
of carbon finance the project activity would not have Available (referring to data): Applied to primary
occurred (the “baseline” scenario); and, such baseline data, “available” means readily collectable, at
scenario would have resulted in higher greenhouse reasonable cost. Applied to secondary data,
gas (GHG) emissions. Each eligible carbon accounting “available” means readily found in reputable,
standard under The CarbonNeutral Protocol provides published sources such as those issued by
tools for how additionality at a project level is tested government departments, academic institutions,
and demonstrated. For further discussion of this topic, specialist research bodies and the secretariats
please see Annex D. of leading GHG standards and protocols.
AIC: Aircraft (or aviation) induced clouds which have Aviation Impact Factor (AIF): A term used in
a potential climate warming affect. See Appendix The CarbonNeutral Protocol for the multiplier
2.5 for further discussion of this topic. applied to the GHG emissions from aviation in
order to take account of the wider impacts of
Assessment: The process of quantifying the GHG aviation on climate. This includes but is not
emissions for a given subject, using robust and limited to short or long-term impacts; from
transparent methods that can be replicated. GHGs alone and others with global warming
influence (for example, soot particles and aviation
Australian Carbon Farming Initiative (CFI): induced clouds); and, direct and indirect impacts
An Australian Department for Environment (for example, the interaction of NOx with methane
emission reduction standard linked to the gases and ozone at high altitudes). See Appendix
Australian Emissions Reduction Fund (ERF). 2.5 for further discussion of this topic.
B
Baseline: Refers to an external emission Boundary: The physical or spatial extent of the
reduction project from which emissions reductions subject – the entity, product or activity – i.e. the
are verified as carbon credits under an applicable sites (including mobile sites such as vehicles)
carbon accounting standard. The baseline for a involved. By way of example, the boundary might
project activity is the projected GHG emissions encompass the office and vehicles of an entity,
that are calculated to occur in the absence of the or the sites used for the manufacture, storage
proposed project activity. For further discussion of and transportation of a product. See Annex B
this topic, please see Annex D. for further information of this topic with
respect to CarbonNeutral® certifications.
6
The CarbonNeutral Protocol | January 2019 Glossary of Terms
C
Carbon credit: A transactable, intangible instrument representing a unit
of carbon dioxide-equivalent (CO2e) – typically one tonne – that is reduced,
avoided or sequestered by a project and is certified/verified to an internationally
recognised carbon accounting standard. Carbon credits are typically ultimately
used to counterbalance or compensate for emissions occurring elsewhere.
Carbon neutral: Condition in which the net GHG emissions associated
with an entity, product or activity is zero for a defined duration.
CarbonNeutral®: The registered trademark of Natural Capital Partners.
CarbonNeutral® certification: The process by which a client receives
recognition that it has met the provisions of The CarbonNeutral Protocol
for a specific subject. CarbonNeutral® certifications can only be awarded
by a CarbonNeutral certifier.
CarbonNeutral certifier: An organisation providing CarbonNeutral®
certification through the application of The CarbonNeutral Protocol.
There are two types of CarbonNeutral certifier: the primary certifier
and secondary certifiers. The primary certifier, Natural Capital Partners,
is responsible for the development and oversight of The Protocol.
Secondary certifiers are Natural Capital Partners’ channel partners which
have been authorised by Natural Capital Partners to provide certifications
in accordance with The CarbonNeutral Protocol. See Annex H for further
information about the selection and management of secondary certifiers.
CarbonNeutral® certification logo: A logo incorporating the CarbonNeutral®
trademark that is licensed to a client upon the successful completion of a
CarbonNeutral® certification. See Annex A for further information on this topic.
CarbonNeutral® certification logo guidelines: Natural Capital Partners’
requirements and guidelines governing the application of CarbonNeutral®
certification logos.
Certification period: The duration for which a CarbonNeutral®
certification is applied to a subject.
Client: The organisation, individual or group of individuals entering
into a contract with a CarbonNeutral certifier for the purposes of a
CarbonNeutral® certification.
Carbon dioxide equivalent (CO2e): A unit of measurement that describes
for a GHG the amount of CO2 in tonnes that would have the same global
Uganda Improved Cookstoves
Project, Africa: The project
warming potential, when measured over a 100 year timescale.
employs resident artisans
for the manufacturing of this Cradle-to-customer: A particular boundary for product subjects. The cradle-
locally-made product which
reduces fuel-use by 36% to-customer boundary includes the extraction and processing of raw materials
compared to traditional (including any packaging materials), manufacture, storage and distribution to
cooking methods
first customer. See Appendix 1.3 for further information on this topic.
Cradle-to-grave: A particular boundary for CarbonNeutral® product
class subjects. The cradle-to-grave boundary includes extraction
and processing of raw materials (including any packaging materials),
manufacture, storage, distribution to first customer, further distribution
7 and storage, retail, use and end-of-life disposal.
The CarbonNeutral Protocol | January 2019 Glossary of Terms
D
Department for Environment, Food and Delivery (referring to carbon credits): Refers to
Rural Affairs (DEFRA): Part of the United the receipt of legal title and ownership of verified
Kingdom Government, which has provided and issued carbon credits by the provider of such
GHG measurement guidance which is reductions. Delivery can occur on a third-party
referenced and applied internationally. external registry, or through written agreement.
E
Emissions sinks: The specific activities or Environmental instruments: The broad category
processes within a boundary which remove of instruments that includes carbon credits, energy
GHGs from the atmosphere. attribute certificates, and all other instruments
designed to track the environmental attributes
Emissions sources: The specific GHG-emitting of project based activities.
activities or processes within a boundary.
Environmental Product Declaration (EPD):
EN 15804: Refers to the European standard An independently verified document that reports
on “Sustainability of construction works – environmental data of products based on life cycle
Environmental Product Declarations – core assessment and other relevant information and in
rules for the product category of construction accordance with the international standard ISO 14025.
products.” It provides core product category See Appendix 1.4 for further discussion on this topic.
rules for type III Environmental Product
Declarations (EPDs) for any construction
product and construction service.
8
The CarbonNeutral Protocol | January 2019 Glossary of Terms
G
Geographically relevant: Pertaining to the specific GHG Protocol Corporate Standard: The World
location of the emissions-generating activity in Business Council for Sustainable Development
question. In order of preference, emission factors (WBCSD) and World Resources Institute’s (WRI)
and secondary data should be applied first from Corporate Accounting and Reporting Standard
local, sub-national datasets; then from national (Corporate Standard). The GHG Protocol
datasets; and then from regional datasets. In the Corporate Standard is the most commonly used
absence of available data from these datasets, organisational GHG accounting methodology.
available global factors and data may be applied. It defines emissions reporting under three key
scopes, ensuring comprehensive reporting.
Greenhouse gas (GHG): GHGs listed under the Kyoto
Protocol and currently targeted for reduction are: GHG Protocol Product Standard: The WBCSD and
carbon dioxide (CO2), methane (CH4), nitrous oxide WRI’s Product Life Cycle Accounting and Reporting
(N2O), hydrofluorocarbons, perfluorocarbons, sulphur- Standard (Product Standard). This document
hexafluoride (SF6), and nitrogen trifluoride (NF3). allows an entity to measure the GHG associated
with the full life cycle of products including raw
Green Gas (or biogas): A generic term for calorific materials, manufacturing, transportation, storage,
gas produced by the breakdown of organic matter, use and disposal.
through anaerobic digestion or fermentation.
Feed stocks include biodegradable materials such Guarantee of Origin (GO): An instrument defined
as manure, sewage, municipal water, green waste in European legislation, issued per MWh, that labels
and plant material. Biogas is primarily methane and tracks electricity from renewable sources to
and carbon dioxide and may have small amounts provide information to electricity customers on
of hydrogen sulphide, siloxanes and moisture which the source of their energy.
make it corrosive. Before biogas is introduced to
a gas distribution grid it is dried and the hydrogen Global Warming Potential (GWP): Gives an
sulphide and carbon dioxide is removed and the index of the activity of atmospheric constituents,
upgraded gas is known as biomethane. referenced to carbon dioxide (which therefore
has a GWP of 1) over a given time horizon.
GHG inventory: An accounting of the amount As an illustration of this, over a 100 year horizon,
of GHGs discharged into the atmosphere from methane has a GWP of 34 (Ref: IPCC Fifth
sources and removed from the atmosphere by Assessment Report (AR5), 2013, p714).
sinks within a specified boundary.
9
The CarbonNeutral Protocol | January 2019 Glossary of Terms
I
Independent qualified third party (referring ISO 14044: Refers to the international standard
to GHG assessment providers): An individual or on “Environmental management – life cycle
organisation experienced in GHG accounting that assessment – requirements and guidelines.”
has no conflict of interest or financial gain in the It specifies requirements and provides guidelines
outcome of the assessment and is approved by for LCA including: definition of the goal and scope
the primary CarbonNeutral certifier. of the LCA, the life cycle inventory analysis (LCI)
phase, the life cycle impact assessment (LCIA) phase,
Insetting: A specific application of offsetting when the life cycle interpretation phase, reporting and
emission reduction projects are sited within a critical review of the LCA, limitations of the LCA,
corporate’s supply chain and sphere of influence. relationship between the LCA phases, and conditions
The focus on location-specific mitigation actions for use of value choices and optional elements.
enables the corporate to gain multiple benefits,
often delivering against both commercial and ISO 14064-1: International Organisation for
sustainability objectives. Standardisation’s specification for quantification
and reporting of GHG emissions and removals
Internal emission reduction: A reduction of at the organisation level. Its approach is similar
GHG emissions made within the boundary of a to the GHG Protocol Corporate Standard.
subject (through for example, undertaking energy
efficiency projects, on-site renewable energy or ISO 14065: International Organisation for
fuel substitution) which is accounted for in the Standardisation’s requirements for the accreditation
subject’s GHG inventory. of entities that validate or verify resulting GHG
emission assertions or claims. The aim of ISO
International Renewable Energy Certificate 14065 is to give confidence to parties that rely upon
(I-REC): A market-based instrument based on a GHG assertion or claim, for example customers or
one MWh of electricity production from a single investors, that the entities providing the declarations
generation facility defined by the International REC are competent to do so, and have systems in place
Standard that labels electricity from renewable to manage impartiality and to provide the required
sources to provide information to electricity level of assurance on a consistent basis.
customers on the source of their energy.
ISO/TS 14067: Refers to the technical specification
ISO 14025: Refers to the international standard on “Greenhouse gases – carbon footprint of products
on “Environmental labels and declarations – type – requirements and guidelines for quantification
III environmental declarations – principles and and communication.” It specifies principles,
procedures.” It establishes the principles and requirements and guidelines for the quantification
specifies the procedures for developing type and communication of the carbon footprint of
III environmental declaration programmes and a product, based on international standards on
type III environmental declarations. It specifically LCA (ISO 14040 and ISO 14044) for quantification
establishes the use of the ISO 14040 series and on environmental labels and declarations
of standards in the development of type III (including ISO 14025) for communication.
environmental declaration programmes and
type III environmental declarations. ISO 21930: Refers to the international standard
on “Sustainability in building construction –
ISO14040: Refers to the international standard environmental declaration of building products.”
on “Environmental management – life cycle It provides a framework and the basic requirements
assessment – principles and framework.” for product category rules as defined in ISO 14025
It describes the principles and framework for type III environmental declarations of building
for life cycle assessment (LCA) including: products. Where this international standard contains
definition of the goal and scope of the LCA, more specific requirements, it complements ISO
the life cycle inventory analysis (LCI) phase, 14025 for the EPD of building products.
the life cycle impact assessment phase (LCIA),
the life cycle interpretation phase, reporting Issuance: The delivery of a specified quantity
and critical review of the LCA, limitations of the of carbon credits into a specified account on
LCA, the relationship between the LCA phases, a registry. Issuance allows carbon credits to
and conditions for use of value choices and be transferred and retired on a registry.
10 optional elements.The CarbonNeutral Protocol | January 2019 Glossary of Terms
Guatemala Water Filtration and Improved Cookstoves:
The Ecofiltro water filter removes 99% of pathogens from non-potable
water, making it safer for local communities to drink in a country where
water-borne disease has been identified as a national priority
O
Offsetting: The practice of compensating for GHG
emissions by retiring (cancelling) carbon credits.
P
PAS 2050: BSI’s Publically Available Specification
for the assessment of the life cycle GHG emissions
of goods and services. The general principles of
PAS 2050 are similar to the GHG Protocol Product
Standard, both of which are appropriate for use
within The CarbonNeutral Protocol.
PAS 2060: Publicly Available Specification for the
demonstration of carbon neutrality produced
and published by the British Standards Institution
(BSi). A BSi PAS provides a sponsored route for any
type of organisation to develop a standardisation
document in response to a market need. This PAS
specifies requirements to be met by any entity
seeking to demonstrate carbon neutrality through
the quantification, reduction and offsetting of GHG
emissions from a uniquely identified subject.
Product Category Rule (PCR): Documents that
define the rules and requirements for EPDs from
a certain product category. They are vital for the
concept of environmental declarations as they
enable transparency and comparability between
different EPDs based on the same PCR.
Primary data: Data collected or directly measured
which has not been subjected to processing
or any other manipulation. Examples of primary
data sources include direct measurement of the
quantity of natural gas burnt in a heating system
(Scope 1) or metered electricity (Scope 2) before
the application of conversion factors used to
determine CO2e emissions.
11The CarbonNeutral Protocol | January 2019 Glossary of Terms
Madagascar Makira REDD+
Project, Africa: A key focus
of the project is to protect the
area’s exceptional biodiversity,
Q
including the lemur which plays
an important role in seed dispersal Quality assurance: Independent review conducted by
and natural forest regeneration
an expert third party to check that the input data for GHG
inventories, or use of a CarbonNeutral® certification logo
meets the requirements of a CarbonNeutral® certification
and is in line with the approach and principles of
The CarbonNeutral Protocol. See Appendix 2.9 for
further guidance on quality assurance and verification.
Quality assurance statement: A written statement by an
expert third party with demonstrated experience declaring
the results of a quality assurance exercise.
R
RE100: A global collaborative initiative led by
The Climate Group that brings together influential
and multinational businesses that are committed
to sourcing 100% renewable electricity.
Renewable Energy Certificate (REC):
An instrument defined in North American regulations
that labels electricity from renewable sources to provide
information to electricity customers on the source of
their energy.
Registry: A database of carbon credits and their transactions,
where each credit has a unique identifier and where credits
are retired (cancelled) upon being sold to offset an equivalent
amount of GHG emissions.
Retire: Refers to the permanent cancellation of carbon
credits from future use in a third-party registry.
Radiative Forcing Index (RFI): A factor used to quantify
non-CO2 warming effects of air travel. RFI is the ratio of total
radiative forcing (RF) of all GHGs to RF from CO2 emissions
alone for aircraft emissions (IPCC, 1999). RFI does not account
for the different residence times of different warming factors.
See Appendix 2.5 for further discussion of this topic.
Julie Larsen Maher © WCS
12The CarbonNeutral Protocol | January 2019 Glossary of Terms
S
Science Based Targets (SBT): A collaborative Scope 3 emissions: All non-Scope 2 indirect
initiative by CDP, World Resources Institute emissions from upstream and downstream
(WRI), the World Wide Fund for Nature (WWF) sources. The most common examples are
and the United Nations Global Compact (UNGC) emissions from: transport-related activities;
that champions science-based target setting to transportation of purchased materials, goods
encourage and support companies in the transition or fuels; employee business travel; employee
to a low-carbon economy. commuting to and from work; transportation
of sold products in third-party owned vehicles;
Scopes: The three “classes” of emissions sources and the transportation and disposal of waste
identified in the GHG Protocol Corporate Standard, and sold products at the end of their life.
relevant to assessing and reporting the GHG
emissions of entities. Secondary data: Data collected or measured
which has been subjected to processing or
Scope 1 emissions: Those direct GHG emissions additional calculations to arrive at a usable output.
directly attributable to the subject that occur from Examples include applying emission factors to
sources that are owned, leased or controlled by flight distances or fuel consumption to produce
the entity seeking CarbonNeutral® certification, a value for GHG emissions.
principally from the following types of activities: the
combustion of fuels for the generation of electricity, Simplified Estimation Method (SEM):
heat, or steam; processing and/or manufacturing Rough, upper bound estimation developed and
of materials or chemicals; transportation in implemented as necessary and appropriate to a
company owned/controlled mobile combustion subject’s GHG assessment. SEMs are intended to
sources; and fugitive emissions from intentional be used for GHG emissions sources that represent
or unintentional releases (e.g. equipment leaks less than 2% of the subject’s total GHG emissions.
and hydrofluorocarbon (HFC) emissions from Collectively SEMs should total no more than 5% of
refrigeration and air conditioning equipment). the subject’s GHG emissions.
Scope 2 emissions: Those emissions indirectly Short Lived Climate Forcers (SLCF):
attributable to the subject from the generation of Emissions with a short atmospheric residence
electricity, heat, steam or cooling that is acquired time which have the potential to affect climate.
and consumed in owned, leased or controlled
equipment or operations. Subject: The entity, product or activity to
which CarbonNeutral® certification is applied.
Kanungu Run-of-River Hydro
Power Project, Uganda:
The project generates ~29GWh
electricity each year, displacing
13 diesel-powered generators that
supply the Ugandan gridThe CarbonNeutral Protocol | January 2019 Glossary of Terms
T
Tradable Instrument for Global Renewables
(TIGR): A global instrument defined by APX
that labels electricity from renewable sources
to provide information to electricity customers
on the source of their energy.
V
Verification: Independent evaluation conducted
by an expert third party with demonstrated
experience to the requirements of an independent
verification standard (such as ISO 14064:3 or ISAE
3410) to check that the quality of input data, a GHG
assessment, or that the use of a CarbonNeutral®
certification logo meets the requirements of a
CarbonNeutral® certification and is in line with
the approach and principles of The CarbonNeutral
Protocol. See Appendix 2.9 for further guidance
on quality assurance and verification.
Verification statement: A written
statement by an expert third party with
demonstrated experience declaring the
results of a verification exercise.
14naturalcapitalpartners.com
Valdivian Coastal Reserve
Preface
Conservation, Chile: This project
restores and enhances a coastal
ecosystem of global biodiversity
significance, which is part of one of
the most carbon-dense forests on
Earth. The project’s pilot restoration
programme involved the planting of
225,000 trees
© 2012 Nick HallThe CarbonNeutral Protocol | January 2019 Preface
Business Climate Action in 2019
Welcome to the 2019 edition of The CarbonNeutral To achieve these goals, successful carbon
Protocol. First developed and published in 2002, neutral strategies were found to focus on:
The Protocol is revised and updated annually to
reflect developments in climate science, international n Reducing emissions through investments in
policy, standards and business practice. It underpins internal efficiency measures that reduce cost and
CarbonNeutral® certifications of organisations, align with targets informed by climate science
products, services and events, and provides a detailed
framework to the design and implementation of n Decarbonising consumed electricity and gas
credible carbon neutral programmes. (Scope 1 and 2 emissions) by direct production
or purchase of renewable energy and the
In 2018 we conducted an extensive review of retirement of energy attribute certificates (EACs)
the application and impact of carbon neutrality
in business. We convened 61 corporates, with n Financing emission reduction projects to
revenues totalling over US$1.3 trillion, in seven compensate for emissions, aligning with specific
events across the U.S. and EU to explore how business objectives of the company, driving
private sector commitments to net zero emissions low carbon sustainable development, building
will support higher ambition in the Paris Agreement. resilience in supply chains and delivering impact
We found that companies are increasingly using on the Sustainable Development Goals
carbon neutrality to establish a price on carbon;
to shift climate action from compliance or corporate This approach, which has at its core market-based
responsibility responses to business strategy carbon pricing, gives a high degree of flexibility in
through the management of business risk finding cost effective solutions to deliver immediate
and opportunity; and, to earn the reputational impact. It ensures that the price of carbon paid by a
benefits from delivering action and impact. company goes directly to projects and activities that
make a positive impact.
Energy Attribute Certificates: Companies can address
their Scope 2 emissions credibly and cost-effectively by
purchasing Energy Attribute Certificates (EACs), which
label electricity produced by wind, solar and biomass
generators as renewable.
16The CarbonNeutral Protocol | January 2019 Preface
Acre Amazonian Rainforest
Conservation Portfolio, Brazil: As part
of its programme, the three projects have
built local health centres and dental clinics,
providing improved local community access
to medical facilities and services
In October 2018, just as we were finishing our enters into force in 2021. It has established a
review, the Intergovernmental Panel on Climate sound foundation which details how all countries
Change (IPCC) published a special report on will account, report and raise ambition in line
the impacts of global warming of 1.5 °C above with the commitments in the Paris Agreement.
pre-industrial levels and set out the critical However, the Katowice Climate Package is
importance of carbon neutrality. The report incomplete and there is more work needed
translated the latest climate science into a to detail the collaborative approaches to
simple call to action: “the world needs to build financing emissions reductions that are
a net zero global economy by 2050.” Our review essential to reaching the “net zero by 2050”
assembled evidence to the fact that companies are recommendation of the IPCC.
using carbon neutral programmes to lead the way
towards that single most important climate goal. Businesses with carbon neutral programmes
And importantly, they will not wait until 2050 to are not waiting for governments to negotiate
take action. and finalise the rules. They are demonstrating
climate leadership and we will continue our
As we finalise this version of The Protocol, the mission to ensure that The Protocol provides an
UN Framework Convention on Climate Change’s internationally recognised framework through
(UNFCCC) annual Climate Summit held in Katowice, which carbon reduction and environmental action
Poland in December has drawn to a close with can be measured, reported and communicated to
the publication of the “Katowice Climate Package.” key audiences in ways which reward their action
This is the detailed “operating manual” needed ahead of and beyond compliance and regulation.
to operationalise the Paris Agreement when it
17The CarbonNeutral Protocol | January 2019 Preface
Target audience on behalf of its clients, and over the past two
The CarbonNeutral Protocol is designed for: years has contracted 14.5 million MWh of energy
attribute certificates from 36 countries and six
Businesses and organisations – continents. In addition, the company has received
To understand what is required to develop the Environmental Finance Best Offset Retailer
a credible carbon neutral programme and award for the past eight years.
to achieve CarbonNeutral® certification.
The CarbonNeutral Protocol is one of the services
Technical partners – To ensure Natural Capital provided by Natural Capital Partners, providing a
Partners’ technical partners (e.g. GHG assessors) framework for CarbonNeutral® certification, enabling
understand what is required of them to ensure its clients to make clear, credible and transparent
their services are consistent with the requirements claims of achieving net zero carbon emissions.
of each CarbonNeutral® certification.
Acknowledgements
The wider “Climate Action Community” – Natural Capital Partners is solely responsible
To encourage partnerships amongst business, for the development and deployment of The
NGOs, policy-makers, regulators and civic CarbonNeutral Protocol as an open access
society to promote high standards for carbon standard. However, we wish to acknowledge and
accounting and the reduction of greenhouse thank our clients, members of our Advisory Group,
gas emissions to net zero. and the many organisations and individuals that
have encouraged, supported and shared their
About Natural Capital Partners expertise with us during the development of
Natural Capital Partners, formerly The Protocol since it was first launched in 2002.
The CarbonNeutral Company, works with We could not have done our work without their
clients to combine business success with invaluable help.
positive impact on the environment and
society. Through collaboration with global Use, legal disclaimer and copyright
project partners, the development of innovative The CarbonNeutral Protocol should be applied in
solutions, and understanding the specific goals conjunction with relevant terms and conditions on
of its clients, the company delivers a broad the use of logos, marks and trademarks owned by
range of products and services for carbon, Natural Capital Partners, as specified in contracts
energy, water, biodiversity and communities with Natural Capital Partners.
in direct operations, consumer markets and
supply chains. The company was founded in 1997 CarbonNeutral® certifications made in accordance
and has more than 300 clients in 33 countries. with previous versions of The CarbonNeutral
Protocol are not retroactively affected by subsequent
Up to the end of 2018, Natural Capital Partners has changes to The CarbonNeutral Protocol.
contracted more than 35 million tonnes of carbon
credits from 397 projects in 56 countries © Natural Capital Partners, 2019
Awards
18naturalcapitalpartners.com
Introduction
Danjiang River Solar Cooker Project, China:
The project aims to provide solar cookers to
100,000 households, reducing fuel consumption
and indoor air pollution associated with
traditional cooking methodsThe CarbonNeutral Protocol | January 2019 Introduction
India Solar Water Heating Project, Asia:
The project provides solar water heaters
to households, businesses and institutions,
offering a renewable, in-house hot water
supply and reducing the dependency on
unreliable grid electricity
Purpose
The CarbonNeutral Protocol describes the requirements
for achieving CarbonNeutral® certification. By following
The CarbonNeutral Protocol, organisations have a
credible, transparent and practical framework for achieving
CarbonNeutral® certification that can be consistently applied
across a broad range of entities, products and activities.
The CarbonNeutral Protocol has been developed as a set
of requirements to provide clients with a single-source guide
to make credible, transparent claims anywhere in the world.
As third-party standards are developed, The CarbonNeutral
Protocol aims to provide a framework which builds upon
the best guidance in the market and offers a unifying
process for making carbon neutral claims which is
recognised internationally.
Approach and principles
The requirements of The CarbonNeutral Protocol
are underpinned by the following principles:
1. Transparency: Disclose the data, methodologies and
assumptions used in GHG calculations and reduction
efforts within the bounds of commercial confidentiality
2. Accuracy: Ensure that the data, methodologies and
assumptions used for GHG calculations and reduction
efforts are accurate and time-relevant, and that the
claims made in connection with such efforts are factual
and credible
3. C
onservative estimation: Be conservative when
making estimations to ensure that they do not understate
GHG impacts nor overstate emissions reductions
4. Continual improvement: Strive to make continual
improvements in GHG accounting and reductions
ider context: Ensure that CarbonNeutral® programmes
5. W
and claims are an appropriate response to the wider
environmental, social and economic impacts of the
subject or organisation, based upon a high-level
understanding of all major impacts
The primary function of the principles above is to guide the
implementation of The Protocol, particularly when the application
of The Protocol to specific issues or situations is ambiguous.
20The CarbonNeutral Protocol | January 2019 Introduction
Relationship to other standards, Activities: Defined by the delivery of utility through
protocols and broader context a combination of mobile and stationary activities,
The Protocol incorporates best practices in the including traditional transportation services (flights,
areas of measurement and monitoring of GHG car journeys, logistics etc), information provision
emissions and the design and certification of such as hosting of data, or professional services,
emission reduction projects. Concerning GHG and one-off events that involve a combination of
measurement, the Protocol is aligned with the mobile and stationary activities.
GHG Protocol Corporate Standard (including
the Scope 2 Guidance), GHG Protocol Product The remainder of this document sets out the
Standard, Environmental Product Declarations requirements for achieving CarbonNeutral®
and the principles of the PAS 2050 for products certification in each of the classes mentioned
and services. above. These requirements are set forth
in the body of this document as well as
The Protocol is also suitable as a platform for in the accompanying Technical Annexes.
compliance with a number of related standards Detailed guidance and clarification on selected
for carbon neutrality, such as the British Standards topics can be found in the Appendices.
Institute’s specification for the demonstration
of carbon neutrality, and Australia’s National The term “must” is used in this document
Carbon Offset Standard Carbon Neutral Program. to indicate a requirement of The Protocol.
Guidance is provided in the form of a cross- The term “must not” indicates prohibited
compliance table for those who seek to comply actions. The term “should” is used to indicate
with these standards (see Annex F). a recommendation, but not a requirement.
The Protocol recognises the importance of taking Development of
action that is appropriate and proportionate. The CarbonNeutral Protocol
Clients should have a high-level understanding of The CarbonNeutral Protocol undergoes
all their major environmental, social, and economic an annual development cycle which involves
impacts. Clients may use internationally recognised input from multiple stakeholders.
management standards, including but not limited
to ISO 14000 and ISO 9000, to identify and manage Natural Capital Partners’ Advisory Group is
their key impacts. consulted on development priorities within
the annual revision cycle. The development of
Structure of The CarbonNeutral Protocol the subsequent version takes place over the
To provide consistency across a wide range of following year, including rounds of consultation
possible situations, The Protocol provides for a with stakeholders. While all opinions and ideas
number of different CarbonNeutral® certifications cannot be included within the Protocol, they will be
corresponding to different possible entities, considered. Suggestions for improvement raised
products and activities. These certifications too late to be included within the next version of
are grouped into three classes (a complete the Protocol will be put on the list for consideration
list of certifications is provided in Annex A): in subsequent versions.
Entities: Defined by legal status and spatial Natural Capital Partners also accepts input from
boundaries, covering all types of organisations, clients and members of the public. Suggestions for
including companies and public sector bodies, development priorities for subsequent versions
households, individuals and sub-divisions of these. of The CarbonNeutral Protocol should be sent to
Natural Capital Partners using the contact details
Products: Physical goods produced for sale. at: www.naturalcapitalpartners.com/contact-us.
Products include standard consumer goods
such as milk, paper or computers, or single-use
or custom-built products such as buildings
or urban developments.
21naturalcapitalpartners.com
Sub-Saharan Africa Improved Water
Infrastructure Project, Africa: Providing
CarbonNeutral® Certification
clean drinking water to small rural communities
through repairing and drilling new boreholes.
In addition, clients have supported extensions to
this project to include the refurbishment of sanitary
and hand-washing facilities combined with school
and community-delivered hygiene workshops
to emphasise the importance of hand-washingThe CarbonNeutral Protocol | January 2019 Case Study
CHEP’s CarbonNeutral Pallet
Offering Drives Customer Value
Certification: CarbonNeutral® product CHEP’s ¼ pallet is fabricated from 100% recycled
plastic and the company minimises emissions
First certified: 2012 from transportation by collaborating with other
companies to eliminate empty truck miles.
Driver: Offer customers a CarbonNeutral pallet, Verified carbon projects are used to offset
and in some countries a full CarbonNeutral remaining emissions
product portfolio
Offset project type: CHEP’s customers can choose
Measure: Lifecycle of ¼ pallet the carbon project they invest in when selecting
CarbonNeutral® pallets to ensure it aligns with their
Reduce: Global supply-chain solutions company own sustainability strategy. As an example: REDD+
CHEP has demonstrated that customers sharing Rainforest Conservation - Brazil
and reusing CHEP’s pallets and reusable plastic
containers saved 1.6 million trees, more than 4,600 Standards: VCS
megalitres of water, 1.4 million tonnes of waste and
2.5 million tonnes of CO2 when compared to one- Communicate: First CarbonNeutral® pallet
way packaging and non-pooled pallets. In addition,The CarbonNeutral Protocol | January 2019 CarbonNeutral® Certification
The Five Steps to Achieving
CarbonNeutral® Certification
As illustrated in Figure 1, there are five steps to achieving CarbonNeutral® certification.
These five steps are mandatory for all classes of certification. While these steps are set
out sequentially, they may be carried out in parallel.
Figure 1: Five Steps to Achieving CarbonNeutral® Certification
Step 1: Define the Subject
Give a clear description of the subject
Step 2: Measure the Subject’s Emissions
Provide a complete and accurate account of the GHG emissions of the subject
Step 3: Set Target
Set a target to achieve net zero emissions
Step 4: Reduce Emissions
Achieve the target through a combination of internal
reductions and environmental instruments
Step 5: Communicate
Provide accurate and transparent information on
how CarbonNeutral® certification is achieved
24The CarbonNeutral Protocol | January 2019 Case Study
VMware Achieves Major Milestone on
Journey to Net Positive Global Impact
Certification: CarbonNeutral® company Reduce: CarbonNeutral® company certification
was achieved two years ahead of schedule
First certified: 2018 through a combination of internal energy
efficiency initiatives, investments in renewable
Driver: VMware 2020 is the company’s global energy including through high quality energy
impact vision to serve as a force for good. attribute certificates (EACs), and financing high
The company has commitments to long-term impact emission reduction projects which deliver
sustainability, accountability and transparency in significant co-benefits to sustainable development
the management of its environmental footprint
Offset project type: Water filtration and improved
Measure: Total GHG emissions for global cookstoves – Guatemala, Improved cookstoves –
operations arising from owned, leased or directly India, and Renewable energy wind – India
controlled stationary and mobile sources that
use fossil fuels and/or emit fugitive emissions; Standards: Gold Standard and VCS
emissions from the generation of purchased
electricity, heat and cooling; and emissions Energy Attribute Certificates (EACs):
from waste and business travel GOs, I-RECs, REGOs
Communicate: CarbonNeutral® companyThe CarbonNeutral Protocol | January 2019 CarbonNeutral® Certification
Step 1: Define Step 2: Measure
the Subject the Subject’s
GHG Emissions
The first step is to clearly define
the subject that will be certified
CarbonNeutral®. The subject is the The second step is to measure the
entity, product or activity being subject’s GHG emissions and provide
certified CarbonNeutral® and a complete and accurate GHG inventory
may be distinct from the client. over a relevant timescale.
Requirements/recommendations
Requirements/recommendations The subject’s GHG emissions must be assessed
The subject to which The CarbonNeutral in accordance with the requirements set out
Protocol is being applied must be for entities, products and activities in Table 1
clearly defined, by name and by on page 28.
description of the relevant legal and/
or physical boundaries. The duration Appendix 2 provides additional information
of a CarbonNeutral® certification must regarding the measurement of GHG emissions.
also be defined. Where applicable, CarbonNeutral certifiers and technical partners
a start date should be defined. should also pay particular attention to the contents
The CarbonNeutral® certification to of Appendix 1 which provides further guidance
be applied must also be defined and and clarification on defining the subject for
must be compatible with the subject. certifications. The Appendices may include new
The definition of the subject and the guidance and clarifications as new versions of
certification must be recorded by The CarbonNeutral Protocol are released.
the CarbonNeutral certifier and the
information retained for the purpose
of auditing.
See Annexes B and G, and Appendix 1
for further guidance and clarification.
26The CarbonNeutral Protocol | January 2019 Case Study
Dentons UK and Middle East
Sets a Leading Example to the
Wider Business, Clients and Peers
Certification: CarbonNeutral® company Reduce: Dentons has reduced its emissions in
several ways, including integrating renewable
First certified: 2017 energy into its energy portfolio through green
tariffs. The Dentons UK and Middle East offices
Driver: As the largest law firm in the world and have implemented a management programme
a member of the Legal Sustainability Alliance, to improve the efficiency of office air conditioning
Dentons wanted to stand out and be regarded and heating and lighting systems, as well as
as an innovative climate leader reducing air travel
Measure: Total GHG emissions for UK and Offset project type: Uganda Improved Water
Middle East operations arising from owned, Infrastructure, Africa
leased or directly controlled stationary and
mobile sources that use fossil fuels and/or emit Standards: Gold Standard
fugitive emissions; emissions from the generation
of purchased electricity, heat, and cooling; Communicate: Dentons UK and Middle East is setting
and emissions from waste and business travel an example to Dentons worldwide and communicates
its achievement internally and externallyThe CarbonNeutral Protocol | January 2019 CarbonNeutral® Certification
Table 1: GHG Emission Quantification Requirements for Different Classes of Certifications
Step Entities Products1 Activities
1. S
elect GHG The GHG Protocol Corporate The GHG Protocol Product Standard, The GHG Protocol Product Standard,
accounting Standard, or ISO 14064-1, or the PAS 2050, ISO/TS 14067 or methods PAS 2050 or methods set out
Climate Registry’s General Reporting set out in steps 2-7 below must be in steps 2-7 must be applied
protocol
Protocol or similar consistent applied unless the CarbonNeutral unless the CarbonNeutral certifier
protocols must be used. certifier identifies valid reasons for identifies valid reasons for using
using other methods. other methods.
2. D
efine boundary The boundary must include all The boundary must be consistent The boundary must be consistent
sites, plants and vehicles owned by with the definition of the subject. with the definition of the subject
or under the direct management For cradle-to-customer subjects, the and must include the sites and/or
control of the subject. boundary must extend to the point vehicles involved in the delivery of
of customer delivery. For cradle-to- the activity.
grave subjects, the boundary must
extend to end-of-life disposal.
3. Identify emissions Assessments must include emissions sources as specified in Annex B – CarbonNeutral® certifications and their
sources specific required assessment emissions sources.
4. Identify GHGs All Kyoto Protocol GHGs, carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons,
to be measured perfluorocarbons, sulphur-hexafluoride (SF6) and nitrogen trifluoride (NF3) must be measured in the assessment,
insofar as they apply to the subject.
5. E
stablish time Assessments must at a minimum For standard consumer products, For standard consumer activities,
period be conducted annually and should assessments must at a minimum assessments must at a minimum
relate to a 12 month data period. be every three years, unless a be annual. For one-off or custom
The final date of an assessment significant change to the product activities the timescale must
data period must not be earlier supply chain has occurred in which relate to the production and
than nine months prior to start of case another assessment must be delivery period.
CarbonNeutral® certification period undertaken. For one-off or custom
(i.e. data more than 21 months old produced products the timescale
is not permitted). must relate to the production and
delivery period.
6. D
etermine data Primary data must be used in preference to secondary data, where it is readily available, up to date and
validity geographically relevant. Estimates, extrapolations, models and industry averages may be used where primary data
is unavailable. When this is done, these assumptions must be recorded by the party carrying out the assessment.
A qualitative and/or quantitative description of the uncertainty associated with the client-supplied data should be
made. In cases where the quality of client supplied data is not known (e.g. in online calculators), the dependency
of results on the quality of input data should be made clear.
7. M
easure GHG The subject’s GHG emissions must either be directly measured or quantified using national, regional, international,
emissions or other relevant emission factors, with preference given to emission factors most closely associated with the
emissions source (e.g. DEFRA emission factors for UK-based assessments).
The assessment must be reported in units of CO2e according to the 100 year potential of each gas. Preference should
be given to the GWP factors included within the latest assessment report of the Intergovernmental Panel on Climate
Change (IPCC) (currently 5th). In instances where most relevant emission factors available use previous GWP factors,
it is still acceptable to use these emission factors. GWP factors applied must be clearly stated in the assessment.
Emission sources that are required to be assessed (see Annex B) but are estimated to represent less than 2%
of the subject’s total GHG emissions, but collectively no more than 5% of the subject’s GHG emissions, may be
calculated and reported using simplified estimation methods.
8. Q
uality assurance All GHG assessments must either be conducted or checked, and in the case of GHG tools and calculators, be
approved, by an independent, expert third party approved by Natural Capital Partners to ensure they have met
the above requirements in this table. Annex G details requirements and recommendations for the presentation
of GHG assessments; and, Appendix 2.9 provides further guidance on quality assurance and verification.
1
If the subject is covered by an EPD which meets the requirements specified in Appendix 1.4, it shall fulfil the GHG emission quantification requirements for
CarbonNeutral® product certification. Please refer to Appendix 1.4 for further guidance on EPDs.
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